# There's A Reason SCHIP Rhymes With Something



## ArrowJ (Mar 19, 2008)

I recently contacted my representatives about my disgust with the proposal to raise tobacco taxes to fund SCHIP. The following is the form letter I got from the "Honorable" Obama

Dear Aaron:

The Children's Health Insurance Program (SCHIP) was created in 1997 to address a critical gap in health coverage, that being coverage for millions of uninsured children who do not qualify for Medicaid but whose families have limited means. SCHIP has been remarkably successful in meetings its goals. Since enactment of SCHIP, the uninsured rate of children has dropped by one-third. Unfortunately, the number of uninsured children has recently started to rise, which adds to the urgency of calls for universal health care broadly and for reauthorizing SCHIP more specifically.

As you know, President Bush vetoed the reauthorization of SCHIP passed by Congress for a second time at the end of 2007. I support this program and disagree with many of the arguments being used by those opposed to expanding health coverage among children. Specifically, some have argued that the current SCHIP proposal will takes us down the path of government-run health care, ultimately resulting in fewer options and lower quality care for American families. Yet, the evidence clearly shows that the majority of children in Medicaid and SCHIP are in private managed care plans that contract with states, and are seen by private doctors in private hospitals.

Others question whether the SCHIP proposal would expand SCHIP to cover many children who are not actually poor. This argument, too, holds little merit, given that 91 percent of children in the SCHIP program come from families with incomes less than 200 percent of the federal poverty level (FPL). Nearly 70 percent of children in SCHIP come from families with income at or less than 150 percent of the FPL. The SCHIP proposal expands the upper income eligibility mostly to accommodate states, such as those in the Northeast, where health care costs are much higher. Out of the 6.6 million children in SCHIP, only 3,000 children live in families with incomes higher than 300 percent of FPL.

Concerns have been raised about "crowd-out", or that SCHIP will cause many people to drop their private coverage and move to "taxpayer-funded, government-run health care." Certainly, every public program expansion will lead to some crowd-out. Yet, the esteemed health economist Jon Gruber, who has done the very analyses on which CBO based its assessment, notes that the SCHIP proposal is the "most cost-effective means of expanding health insurance coverage" because federal tax dollars are allocated to children in need. Further, one 10-state analysis conducted as part of the Congressionally Mandated SCHIP evaluation (as opposed to statistical modeling by Gruber) concluded that close to 3 in 4 children (72 percent) enrolled in SCHIP come from the ranks of the uninsured or Medicaid, not from private coverage. The crowd out phenomenon has less applicability to low-income populations.

*A number of other arguments against reauthorizing SCHIP are similarly erroneous. Tobacco companies have reported that increases in the tobacco tax to help pay for SCHIP are regressive, although they make no mention that this tax increase will serve as a deterrent to those inclined to start, or continue, smoking. Studies indicate that for every 10 percent increase in the price of cigarettes, youth smoking declines by 7 percent. Given that smoking levels are highest among low-income populations, disincentives, such as a higher tax, are believed to positively affect these populations, both financially and, ultimately, physically.*

I have heard complaints that the SCHIP bill will weaken the private system of medicine and does little to address the cost of care. Again, I would note that the SCHIP proposal is largely conducted through the private system, which is why the SCHIP reauthorization is supported by private health insurance plans, medical specialty groups and big businesses, all of whom are hardly proponents for "government run health care." Certainly, affordability of health care is a serious issue, but this bill is not designed to address the cost of care, nor is it mutually exclusive to cost containment reforms.

With regard to the argument that the Bush plan is better because it levels the playing field for health insurance by giving every family a standard tax deduction of $15,000 to assist purchase of private health coverage, I would note that this plan has little relevance for low-income populations because they are: a) less likely to have access to group health insurance or employer sponsored health insurance (the private, individual market plans are much more expensive, particularly if a member of the family has a health condition); and b) less likely have enough income to pay taxes and so would not gain meaningful financial assistance to purchase health insurance. I would also note the SCHIP proposal is tested and known to be effective. The President's plan is not.

Similarly, accusations of budget "gimmicks" are groundless. The bill is a five-year reauthorization proposal, and the revenues in the bill more than pay for the spending in this period. After the five-year reauthorization period, the budget rules set baseline funding for five additional years based on funding in the last year of authorization (2012). The final year amount is lowered in this bill to provide an appropriate baseline of funding going forward. Certainly the Congress and the President will reauthorize SCHIP in five years and necessarily revisit the funding level, hopefully as part of a larger health reform discussion. Congress must address the bigger issues of the 45 million uninsured Americans of all ages and develop proposals to rein in rising health costs.

Finally, for those who argue that the SCHIP proposal is taking money away from kids to cover adults, I would note that it was the Administration that began encouraging and granting waivers to cover parents because officials rightfully noted that when parents are covered, children are more likely to be enrolled for coverage too. Such coverage is more continuous and less interrupted and represents new, rather than substitution, coverage. Parental coverage is associated with the more effective use of coverage among children, as measured by access to care, having a regular source of care, and using preventive services.

I remain firmly committed to the State Children's Health Insurance Program (SCHIP). Although Congress passed the SCHIP reauthorization bill, the President vetoed this legislation for a second time this past December. This legislation would have been a major step forward in covering low-income uninsured children. The SCHIP program has continually had my full support, and I strongly opposed this veto.

On December 29, 2007, the President signed into law the Medicare, Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173), which provides FY2008 and FY2009 SCHIP allotments through March 31, 2009, and enough additional funding to cover every state's currently projected federal SCHIP spending through March 31, 2009. It is my hope that in the future the President and Congress will work together when SCHIP reauthorization comes up for debate again in 2009.

Over 6 million children are able to receive medical care because of SCHIP, and if this proposal had passed, more than 3 million additional children would have been covered. I am disappointed that the Congress found itself having to debate whether children with asthma, injuries, diabetes, cancer and so many other diseases should be able to receive the health care they need at the time they need it.

Again, Aaron, thank you for writing.

Sincerely,

Barack Obama
United States Senator​
There is a great article by Lew Rothman about this in the Spring 2008 issue of Cigar Magazine. I tried to find it online, but failed.


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## nativetexan_1 (Jan 1, 2008)

That has got to be the LONGEST letter ever sent by a Senator, form letter or not. They know VERY few people are going to read a letter that long.


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## texasmatt (Feb 25, 2008)

Is there some sparknotes for that letter?


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## Darren's Godiva (Jul 16, 2007)

Well here is another reason I am pissed off about this election year.


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## hayward_tenney (Mar 18, 2008)

That Lew Rothman article is excellent reading, and I suggest that people seek it out in their local B&M, if they haven't gotten a chance to read it.


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## Deuce Da Masta (Dec 4, 2006)

The letter i got from our governor here in Michigan basically said i support it, too bad.


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## happy1 (Jun 29, 2007)

deuce said:


> The letter i got from our governor here in Michigan basically said i support it, too bad.


About what my Sentors said too


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## Cigary4343 (Jul 12, 2008)

nativetexan_1 said:


> That has got to be the LONGEST letter ever sent by a Senator, form letter or not. They know VERY few people are going to read a letter that long.


I got as far as Dear Aaron and fell asleep.


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## ArrowJ (Mar 19, 2008)

Cigary4343 said:


> I got as far as Dear Aaron and fell asleep.


That really is the point I think...and part of the problem if you know what I mean.


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## baba (Nov 5, 2007)

Sorry - but it is garbage. I work in health care. Kids can get medical without difficulty. This is just feel good idea to raise taxes. If they proposed to give health care to all people under a certain income, that would make sence, not just children. I would be willing to endure yet another tax increase for a good reason. Not something like a bogas tax that uses children to sell it.


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## ArrowJ (Mar 19, 2008)

baba said:


> If they proposed to give health care to all people under a certain income, that would make sence, not just children. I would be willing to endure yet another tax increase for a good reason.


But that doesn't make sense either. Socialized health care is, well, socialized. I prefer democracy working in a free-market than socialization.


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## Fatmandu (Mar 18, 2008)

The Taliban hide behind children when the strike too.


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## Doogie (Oct 15, 2007)

time to start fighting back


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